1. Ch. 3 - FOIB Impact of Culture on Business & Labour Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

2. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. The Impact of Culture on International Business Impact of Culture in Business Culture’s role in business can be as important as the influence of tariffs, legal regulations, and competition. Failure to consider that influence could ruin a negotiation, derail a marketing campaign, and cause labour unrest.

3. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. The Impact of Culture on International Business Culture has a direct impact on products. It is important to consider factors such as climate and religious beliefs when considering entering a foreign market. For example, there is no market for Canadian pork in Israel, as Jewish culture forbids eating this product.

4. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. The Impact of Culture on International Business Culture also has a direct impact on services. Canada’s financial service industry has successfully entered foreign markets. As attitudes towards money are often culturally determined, Canadian banks in foreign countries must understand their clients’ culture to meet their savings goals. For example, many Japanese families save for specially- made kimonos for their daughters. Used under license from Shutterstock, Inc.

5. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. The Impact of Culture on the Labour Market The Canadian government, influenced by labour unions and cultural values, regulates the labour force:  Provides minimum wage  Mandates workplace safety  Prevents discrimination  legislates holidays and hours of work

6. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. The Impact of Culture on the Labour Market Rationalization Any attempt to increase a company’s effectiveness or efficiency, including downsizing, cutbacks, layoffs, and relocating corporate functions and activities to countries that have cheaper labour and few or no union problems.

7. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. The Impact of Culture on the Labour Market Not all countries share Canada’s values in terms of labour and the workplace. Canadian business people may encounter differences in the following areas:  Child labour Child labour  Walmart, Red Lobster, etc. Walmart, Red Lobster, etc.  Discrimination  Wages Wages  Standards and practices  Indigenous cultures

8. Assignment  Complete the graphic organizer provided.  Using your textbook pgs. 79 – 83, fill in the required info for the graphic organizer. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

9. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. The Impact of Culture on the Labour Market

10. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Business Meetings and Negotiations Every country has a meeting culture that is based on the following factors:  Time perception—monochronic or polychronic  Spatial perception—individual comfort levels with personal space and physical contact  Non-verbal communication—eye contact and body language  Business etiquette—appropriate topics of conversation, whether or not you should present a gift, etc.

11. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Business Meetings and Negotiations Members of different cultures perceive time in one of two ways: Monochronic Time is seen as linear and sequential, and focus is placed on one thing at a time in a logical progression. Polychronic Time is seen as involving many things happening simultaneously with the participation of many people. Time is flexible, and schedules are not of primary importance.

12. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Business Meetings and Negotiations

13. Task:  Read pgs. 84 – 87  Answer questions 3.19 – 3.23 0n pg. 87 Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.

14. Culture’s Influence on Workplace Values Geert Hofstede

16. Cultural Dimensions  Used to describe specific aspects of culture and assist nations doing business with differing cultural values  Note these dimensions reflect a society’s tendencies rather than a particular individual

17. 1) Power Distance (PDI)  Used to measure how the difference in power between people is perceived High Power Distance – Found in cultures where some people are considered superior because of social status, gender, race, age, education, birth, wealth, personal achievements or family background (i.e. Mexico, Indonesia, & India) Low Power Distance – found in cultures who assume equality among people and focus on earned status rather than recognized status (i.e. Austria, Israel, and Canada)

18. 2) Uncertainty Avoidance (UAI)  The way different cultures adapt to change High Uncertainty Avoidance – Countries/ cultures that uphold formal rules and rituals, and hold strong religious convictions – High conformity and little tolerance of outsiders (i.e. Saudi Arabia, Mexico, Japan) Low Uncertainty Avoidance – Cultures who value risk-taking, seek change, and have a high tolerance for differences – Much easier to establish business relations in these countries (i.e. Canada, Sweden & Singapore)

19. 3) Masculinity versus Femininity (MAS)  Masculinity - Refers to the degree to which a culture values assertiveness, competitiveness, ambition and the accumulation of material goods. (i.e. Japan, and Mexico)  Femininity – the degree to which cultures value nurturing, family relationships, and social support systems. Value co-operation and solidarity with those less fortunate. (i.e. Scandinavia, Thailand, and Portugal)

20. 3) Masculinity versus Femininity (MAS)  Most western cultures do not have such rigidly defined roles however, many cultures encourage distinct gender roles  Hofstede’s terms refer to the degree to which these culturally mandated gender roles operate for men and women within the country.

21. 4) Individualism versus Collectivism (IDV)  Refers to the extent to which people are expected to make their own decisions regarding their choice of education, job, or even life partner.  Highly individualistic countries promote personal decision making and defending themselves (i.e. Canada, USA and Australia)  Collectivist cultures value the greater good, and many of their futures have been decided by government, church or family (i.e. Cuba, China)

22. 5) Orientation (LTO)  Long-term Orientation – countries who value thrift and perseverance to achieve long-term goals, usually so distant that only future generations will appreciate them. (Respect tradition and a hard work ethic)  Short-Term Orientation – cultures where ``now`` is favoured over ``then``. These cultures are results oriented, looking at daily profit figures and yearly annual reports and make business decisions based on short term changes in the market

23. Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc. Culture’s Influence on the Workplace Cultural dimensions (identified by Geert Hofstede)  Power Distance (PDI)—how the difference in power between people is perceived  Uncertainty Avoidance (UAI)—how do various cultures adapt to change  Masculinity vs Femininity (MAS)—the degree to which a culture values assertiveness, competitiveness, ambition, and the accumulation of material goods  Individualism vs Collectivism (IDV)—the extent to which people are expected to make their own decisions regarding their choice of education, job, etc.  Orientation (LTO)—the degree to which cultures value short- or long-term goals

24. Task:  Read pgs. 88 – 91  Answer questions 3.24 – 3.30 0n pg. 91 Chapter 3: WHAT IS CULTURE? Fundamentals of International Business Copyright © 2010 Thompson Educational Publishing, Inc.